The Experts below are selected from a list of 20847 Experts worldwide ranked by ideXlab platform
V V Chari - One of the best experts on this subject based on the ideXlab platform.
-
thoughts on the Federal Reserve System s exit strategy
Social Science Research Network, 2010Co-Authors: V V ChariAbstract:Now that global financial markets are beginning to stabilize, the Federal Reserve is considering how best to reabsorb liquidity so as not to create inflation as the economy revives. Three broad strategies for managing monetary Reserves in the United States include: (1) paying interest on excess Reserves, (2) managing interest rates on short-term deposits, and (3) selling back financial assets such as mortgage-backed securities. From a theoretical standpoint, these strategies are identical; which approach is employed is not of fundamental macroeconomic importance. Nevertheless, this note argues that several potentially large dangers associated with the first two strategies have been overlooked, whereas a frequently cited weakness of asset sales has been exaggerated. The best course is a careful blend of all three approaches, with strong emphasis on a preannounced program of gradual sales of financial assets. Such a joint strategy is likely to have the highest probability of success in draining Reserves, with minimal risk.
-
thoughts on the Federal Reserve System s exit strategy
Economic Policy Paper, 2010Co-Authors: V V ChariAbstract:How can banks and similar institutions design optimal compensation Systems? Would such Systems conflict with the goals of society? This paper considers a theoretical framework of how banks structure job contracts with their employees to explore three points: the structure of a socially optimal compensation System; the structure of a compensation System that is privately optimal, given the reality of government-guaranteed bank debt; and policy interventions that can lead from the second structure to the first. Analysis reveals a potential policy option: providing proper incentives to banks by charging debt default insurance premiums that depend on the compensation structure banks choose. If policymakers consider this unwise or impractical, then it may be useful for government to regulate bank compensation more directly.
Simon Johnson - One of the best experts on this subject based on the ideXlab platform.
-
governing the Federal Reserve System after the dodd frank act
Social Science Research Network, 2013Co-Authors: Peter Contibrown, Simon JohnsonAbstract:The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act increased the powers of the Board of Governors of the Federal Reserve System along almost all dimensions pertaining to the supervision and operation of Systemically important financial institutions. With Ben S. Bernanke’s term as Fed chair ending in January 2014, much of the public’s attention has focused appropriately on the identity, views, and experience of candidates for the successor, whose influence on bank regulation will be considerable. President Barack Obama’s selection and the Senate’s confirmation of current Board vice chair Janet L. Yellen as chair comes at the end of a long public debate on this nomination. By statute, however, the chair decides almost nothing herself: The Federal Reserve System is supervised by a Board of seven presidentially appointed, Senate-confirmed governors, of whom the chair is but one. In practice, the chair has frequently had a disproportionate influence on the monetary policy agenda and also the potential to predominate on regulatory matters - working closely with the Fed Board’s senior staff. Even so, for the most significant decisions, the Board must vote, and the chair must rely on the votes of the other six governors (for Board matters) and in addition, on a rotating basis, the votes of five of the twelve Reserve Bank presidents (for monetary policy). On regulation and supervision issues, the chair can do little of consequence without the support of at least three other governors.This Policy Brief, published by the Peterson Institute for International Economics, focuses on the powers and responsibilities of the Board following Dodd-Frank and argues in favor of changing the process of considering and choosing the Board’s governors. In nominating and confirming new governors, the president and Congress should make greater efforts to appoint only highly qualified people familiar with both regulatory and monetary matters. They should ensure that governors of the Fed can work effectively with staff and engage on an equal basis with the chair. An appropriate aspirational analogy is to the justices of the Supreme Court: Although one among them is chief, with particular duties and recognition, each justice must answer for the exercise of her duties, and each is subject to public engagement and scrutiny at the appointment process and beyond.
-
governing the Federal Reserve System after the dodd frank act
Research Papers in Economics, 2013Co-Authors: Peter Contibrown, Simon JohnsonAbstract:The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act increased the powers of the Board of Governors of the Federal Reserve System along almost all dimensions pertaining to the supervision and operation of Systemically important financial institutions. The authors argue that in light of these changes, the process of considering and choosing governors should also be changed. In nominating and confirming new governors, the president and Congress should make greater efforts to appoint only highly qualified people familiar with both regulatory and monetary matters. They should ensure that governors can work effectively with staff and engage on an equal basis with the chair. This is a pressing matter given that within the next 12 months there may be as many as four appointments to the Board, reflecting an unusually high degree of turnover at a critical moment for the development of regulatory policy, including rules on equity capital funding for banks, the ratio of debt-to-equity (leverage) they are permitted, the funding structure of bank holding companies, and whether and how much banks should be allowed to engage in commodity-related activities.
Gary Richardson - One of the best experts on this subject based on the ideXlab platform.
-
liquidity risk bank networks and the value of joining the Federal Reserve System
Journal of Money Credit and Banking, 2018Co-Authors: Charles W Calomiris, Matthew Jaremski, Haelim Park, Gary RichardsonAbstract:Reducing Systemic liquidity risk related to seasonal swings in loan demand was one reason for the founding of the Federal Reserve System. Existing evidence on the post-Federal Reserve increase in the seasonal volatility of aggregate lending and the decrease in seasonal interest rate swings suggests that it succeeded in that mission. Nevertheless, less than 8 percent of state-chartered banks joined the Federal Reserve in its first decade. Some have speculated that nonmembers could avoid higher costs of the Federal Reserve’s Reserve requirements while still obtaining access indirectly to the Federal Reserve discount window through contacts with Federal Reserve members. We find that individual bank attributes related to the extent of banks’ ability to mitigate seasonal loan demand variation predict banks’ decisions to join the Federal Reserve. Consistent with the notion that banks could obtain indirect access to the discount window through interbank transfers, we find that a bank’s position within the interbank network (as a user or provider of liquidity) predicts the timing of its entry into the Federal Reserve System and the effect of Federal Reserve membership on its lending behavior. We also find that indirect access to the Federal Reserve was not as good as direct access. Federal Reserve member banks saw a greater increase in lending than nonmember banks.
-
mutual assistance between Federal Reserve banks 1913 1960 as prolegomena to the target2 debate
Research Papers in Economics, 2014Co-Authors: Arnaud Mehl, Barry Eichengreen, Livia Chițu, Gary RichardsonAbstract:This paper reconstructs the forgotten history of mutual assistance among Reserve Banks in the early years of the Federal Reserve System. We use data on accommodation operations by the 12 Reserve Banks between 1913 and 1960 which enabled them to mutualise their gold Reserves in emergency situations. Gold Reserve sharing was especially important in response to liquidity crises and bank runs. Cooperation among Reserve banks was essential for the cohesion and stability of the US monetary union. But fortunes could change quickly, with emergency recipients of gold turning into providers. Because regional imbalances did not grow endlessly, instead narrowing when region-specific liquidity shocks subsided, mutual assistance created only limited tensions. These findings speak to the current debate over TARGET2 balances in Europe. JEL Classification: F30, N20
-
mutual assistance between Federal Reserve banks 1913 1960 as prolegomena to the target2 debate
National Bureau of Economic Research, 2014Co-Authors: Barry Eichengreen, Arnaud Mehl, Livia Chițu, Gary RichardsonAbstract:This paper reconstructs the forgotten history of mutual assistance among Reserve Banks in the early years of the Federal Reserve System. We use data on accommodation operations by the 12 Reserve Banks between 1913 and 1960 which enabled them to mutualise their gold Reserves in emergency situations. Gold Reserve sharing was especially important in response to liquidity crises and bank runs. Cooperation among Reserve banks was essential for the cohesion and stability of the US monetary union. But fortunes could change quickly, with emergency recipients of gold turning into providers. Because regional imbalances did not grow endlessly, instead narrowing when region-specific liquidity shocks subsided, mutual assistance created only limited tensions. These findings speak to the current debate over TARGET2 balances in Europe.
-
categories and causes of bank distress during the great depression 1929 1933 the illiquidity versus insolvency debate revisited
Explorations in Economic History, 2007Co-Authors: Gary RichardsonAbstract:During the contraction from 1929 to 1933, the Federal Reserve System tracked changes in the status of all banks operating in the United States and determined the cause of each bank suspension. This essay analyzes chronological patterns in aggregate series constructed from that data. The analysis demonstrates both illiquidity and insolvency were substantial sources of bank distress. Periods of heightened distress were correlated with periods of increased illiquidity. Contagion via correspondent networks and bank runs propagated the initial banking panics. As the depression deepened and asset values declined, insolvency loomed as the principal threat to depository institutions. � 2007 Published by Elsevier Inc.
-
quarterly data on the categories and causes of bank distress during the great depression
National Bureau of Economic Research, 2006Co-Authors: Gary RichardsonAbstract:During the contraction from 1929 through 1933, the Federal Reserve System tracked changes in the status of all banks operating in the United States and determined the cause of each bank suspension. This essay introduces quarterly series derived from that hitherto dormant data and presents aggregate series constructed from it. The new data series will supplement, and in some cases, supplant the data currently used to study banking panics of the Great Depression, which was published by the Federal Reserve Board of Governors in 1937.
Peter Contibrown - One of the best experts on this subject based on the ideXlab platform.
-
governing the Federal Reserve System after the dodd frank act
Social Science Research Network, 2013Co-Authors: Peter Contibrown, Simon JohnsonAbstract:The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act increased the powers of the Board of Governors of the Federal Reserve System along almost all dimensions pertaining to the supervision and operation of Systemically important financial institutions. With Ben S. Bernanke’s term as Fed chair ending in January 2014, much of the public’s attention has focused appropriately on the identity, views, and experience of candidates for the successor, whose influence on bank regulation will be considerable. President Barack Obama’s selection and the Senate’s confirmation of current Board vice chair Janet L. Yellen as chair comes at the end of a long public debate on this nomination. By statute, however, the chair decides almost nothing herself: The Federal Reserve System is supervised by a Board of seven presidentially appointed, Senate-confirmed governors, of whom the chair is but one. In practice, the chair has frequently had a disproportionate influence on the monetary policy agenda and also the potential to predominate on regulatory matters - working closely with the Fed Board’s senior staff. Even so, for the most significant decisions, the Board must vote, and the chair must rely on the votes of the other six governors (for Board matters) and in addition, on a rotating basis, the votes of five of the twelve Reserve Bank presidents (for monetary policy). On regulation and supervision issues, the chair can do little of consequence without the support of at least three other governors.This Policy Brief, published by the Peterson Institute for International Economics, focuses on the powers and responsibilities of the Board following Dodd-Frank and argues in favor of changing the process of considering and choosing the Board’s governors. In nominating and confirming new governors, the president and Congress should make greater efforts to appoint only highly qualified people familiar with both regulatory and monetary matters. They should ensure that governors of the Fed can work effectively with staff and engage on an equal basis with the chair. An appropriate aspirational analogy is to the justices of the Supreme Court: Although one among them is chief, with particular duties and recognition, each justice must answer for the exercise of her duties, and each is subject to public engagement and scrutiny at the appointment process and beyond.
-
governing the Federal Reserve System after the dodd frank act
Research Papers in Economics, 2013Co-Authors: Peter Contibrown, Simon JohnsonAbstract:The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act increased the powers of the Board of Governors of the Federal Reserve System along almost all dimensions pertaining to the supervision and operation of Systemically important financial institutions. The authors argue that in light of these changes, the process of considering and choosing governors should also be changed. In nominating and confirming new governors, the president and Congress should make greater efforts to appoint only highly qualified people familiar with both regulatory and monetary matters. They should ensure that governors can work effectively with staff and engage on an equal basis with the chair. This is a pressing matter given that within the next 12 months there may be as many as four appointments to the Board, reflecting an unusually high degree of turnover at a critical moment for the development of regulatory policy, including rules on equity capital funding for banks, the ratio of debt-to-equity (leverage) they are permitted, the funding structure of bank holding companies, and whether and how much banks should be allowed to engage in commodity-related activities.
Michael D Bordo - One of the best experts on this subject based on the ideXlab platform.
-
Federal Reserve structure economic ideas and monetary and financial policy
Social Science Research Network, 2019Co-Authors: Michael D Bordo, Edward Simpson PrescottAbstract:The decentralized structure of the Federal Reserve System is evaluated as a mechanism for generating and processing new ideas on monetary and financial policy. The role of the Reserve Banks starting in the 1960s is emphasized. The introduction of monetarism in the 1960s, rational expectations in the 1970s, credibility in the 1980s, transparency, and other monetary policy ideas by Reserve Banks into the Federal Reserve System is documented. Contributions by Reserve Banks to policy on bank structure, bank regulation, and lender of last resort are also discussed. We argue that the Reserve Banks were willing to support and develop new ideas due to internal reforms to the FOMC that Chairman William McChesney Martin implemented in the 1950s. Furthermore, the Reserve Banks were able to succeed at this because of their private-public governance structure, a structure set up in 1913 for a highly decentralized Federal Reserve System, but which survived the centralization of the System in the Banking Act of 1935. We argue that this role of the Reserve Banks is an important benefit of the Federal Reserve’s decentralized structure by allowing for more competition in ideas and reducing groupthink. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
-
Federal Reserve structure economic ideas and monetary and financial policy
Research Papers in Economics, 2019Co-Authors: Michael D Bordo, Edward Simpson PrescottAbstract:The decentralized structure of the Federal Reserve System is evaluated as a mechanism for generating and processing new ideas on monetary and financial policy. The role of the Reserve Banks starting in the 1960s is emphasized. The introduction of monetarism in the 1960s, rational expectations in the 1970s, credibility in the 1980s, transparency, and other monetary policy ideas by Reserve Banks into the Federal Reserve System is documented. Contributions by Reserve Banks to policy on bank structure, bank regulation, and lender of last resort are also discussed. We argue that the Reserve Banks were willing to support and develop new ideas due to internal reforms to the FOMC that Chairman William McChesney Martin implemented in the 1950s. Furthermore, the Reserve Banks were able to succeed at this because of their private-public governance structure, a structure set up in 1913 for a highly decentralized Federal Reserve System, but which survived the centralization of the System in the Banking Act of 1935. We argue that this role of the Reserve Banks is an important benefit of the Federal Reserve?s decentralized structure and contributes to better policy by allowing for more competition in ideas and reducing groupthink.
-
current Federal Reserve policy under the lens of economic history essays to commemorate the Federal Reserve System s centennial
2015Co-Authors: Owen F Humpage, Michael D BordoAbstract:1. Introduction: context and content Owen Humpage 2. The uses and misuses of economic history Barry Eichengreen 3. How and why the Fed must change in its second century Allan H. Meltzer 4. The lender of last resort: lessons from the Fed's first 100 years Mark A. Carlson and David C. Wheelock 5. Close but not a central bank: the New York Clearing House and issues of Clearing House loan certificates Jon Moen and Ellis Tallman 6. Central-bank independence: can it survive a crisis? Forrest Capie and Geoffrey Wood 7. Politics on the road to the US monetary union Peter L. Rousseau 8. US precedents for Europe Harold James 9. The limits of bimetallism Christopher M. Meissner 10. The Reserve pyramid and interbank contagion during the Great Depression Kris Mitchener and Gary Richardson 11. Would large-scale asset purchases have helped the 1930s? An investigation of the responsiveness of bond yields from the 1930s to changes in debt levels John Landon-Lane 12. A tale of two countries and two booms - Canada and the United States in the 1920s and the 2000s: the roles of monetary and financial stability policies Ehsan U. Choudhri and Lawrence L. Schembri 13. It is history, but it's no accident: differences in residential mortgage markets in Canada and the United States Angela Redish 14. Monetary regimes and policy on a global scale: the oeuvre of Michael D. Bordo Hugh Rockoff and Eugene N. White 15. Reflections on the history and future of central banking Michael D. Bordo.